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Mark the following statements as True or False (1/2 X 10 = 5 Marks) In the management of cash and marketable securities, the primary concern
- Mark the following statements as True or False (1/2 X 10 = 5 Marks)
- In the management of cash and marketable securities, the primary concern is profitability.
- For most modern corporations, the more cash they have, the better off they are.
- Minimizing cash balances can improve overall corporate profitability.
- For most firms, the primary motive for holding cash is the transaction motive.
- Cash balances are usually determined by the amount of cash flowing through the firm on a yearly basis.
- A primary goal of cash management is to insure that the inflows and outflows of cash are synchronized.
- It is possible for companies to operate with negative cash balances on their books.
- If a firm averages $2,000 in daily credit sales and offers 60-day terms, the average accounts receivable balance will be $120,000.
- When a potential customer has a mediocre credit history, a firm should never consider allowing them to become a customer.
If a company would like to reduce their average collection period, they can either offer a cash discount or increase their net terms
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